Angola LNG plant closure stokes fear of oil output decline

Following the closure of a critical liquefied natural gas plant in Angola, crude oil shipments from the nation may be reduced by 50,000 barrels per day, or about 3 percent of its daily output.

Following the closure of a critical liquefied natural gas plant in Angola, crude oil shipments from the nation may be reduced by 50,000 barrels per day, or about 3 percent of its daily output, Reuters reported. With the plant offline, operators are scaling back their extraction operations in the area and could potentially resort to burning off gas in flare stacks.

Last month, the energy firms, including Chevron and BP, involved in overseeing construction of Angola's LNG plant said that completion of the project was pushed back due to issues related to its mechanics, reporting a failure of an emergency valve. Engineering firm Bechtel, which is building the plant, raised its initial estimate for construction costs to between $12 and $14 billion.

The demand for the LNG plant is expected to intensify as Angola attempts to reverse decreases in both energy production and exports, according to Reuters.

"As these deepwater fields get older, the gas content rises, and that only increases the importance of having the LNG plant online," an industry source in Luanda told Reuters.

More information on the power market in Angola can be found on PennEnergy's research area.

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